In a tough environment, with margins falling and deal flow stubbornly slow, one bank stood out for its leadership in event-driven financings. For its broad roster of deals and wide distribution in volatile conditions, HSBC is IFR Asia’s Loan House and Hong Kong Loan House of the Year.
HSBC distinguished itself in 2016 with its targeted and calculated approach to syndicated lending. It coped better than its peers with rising competition and falling pricing, choosing to focus on event-driven financings rather than low-margin, high-grade clubs, and dodged the stress in the oil and gas, shipping and commodities sectors.
The bank led key deals for financial, corporate and private equity clients across the region, and did more in the technology sector than in previous years, shrugging off its conservative reputation and proving its ability to move with the times.
It presence on Asia’s biggest acquisition financings during the review period was especially impressive.
“2016 finally saw the acquisition finance deal count explode, and HSBC was at the forefront of the market, leading a significant proportion of the key transactions across Asia Pacific,” said Phil Lipton, head of loan syndications in Asia Pacific.
HSBC’s wins in acquisition and leveraged finance outstripped its competitors. The bank’s marquee deal of the year came early in the review period, when it acted as lead financial adviser on state-owned China National Chemical Corp’s proposed SFr43bn (US$42.35bn) acquisition of Swiss seeds and pesticides company Syngenta.
HSBC’s balance sheet was crucial to the deal, but it used its resources selectively, underwriting and then syndicating a US$20.2bn non-recourse facility that complemented a US$12.7bn Chinese-led bridge facility for ChemChina.
China’s Tencent Holdings also turned to HSBC – this time alongside other banks – for a US$3.5bn non-recourse loan backing its purchase of a majority stake in Finnish mobile games developer Supercell. HSBC was one of the seven leads on the deal, which attracted 17 other lenders.
HSBC was an original lead arranger on the €3.2bn (US$3.52bn) 12-month bridge for Thailand’s Berli Jucker’s purchase of Bangkok-listed hypermarket operator Big C Supercenter in March and the partial sell-down of the A$5.9bn (US$4.41bn) financing for the Hastings Funds Management-led consortium on its bid for New South Wales state’s transmission network TransGrid.
Smaller M&A loans included a sole MLAB role on a A$465m loan for US clothing firm Hanesbrands’ acquisition of Australia’s underwear and T-shirt manufacturer Pacific Brands in July and a joint bookrunner role on a US$425m term loan for a consortium’s acquisition of the Martabe gold and copper mine in Indonesia in May.
The bank also worked with financial sponsors on a number of leveraged buyouts, including a HK$2.8bn (US$360m) senior loan backing private equity firm Permira’s acquisition of Hong Kong’s corporate and investor services business Tricor Holdings and a A$790m stapled financing for the purchase of a majority stake in Australian cancer and cardiac services provider Genesis Care in November, as well as a A$432m loan for private equity firm Blackstone Group’s acquisition of a portfolio of industrial sites in Australia in October.
HSBC was one of two active bookrunners on Macquarie Bank’s £1.465bn (US$2.02bn) three and five-year loan. It was also among the leads on Chinese internet search engine Baidu’s debut US$2bn five-year facility in June and two previous loans for Tencent, including a US$2.45bn debut loan in December 2015 and a US$4.44bn facility in June, all of which were well received.
In its Hong Kong backyard, HSBC again showed the depth of its relationships as one of four leads on subway operator MTR Corp’s HK$25bn borrowing, the company’s first syndicated financing in eight years. It also arranged Haitong International Securities Group’s HK$12.8bn financing, which attracted 28 lenders.
The collaboration with the bonds team was on show with deals such as a sole MLAB role on a HK$4.5bn loan for property developer New World Development in June, which followed a US$950m bond at the start of the review period and came ahead of a US$1.2bn perpetual in September.
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